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Income Tax Appellate Tribunal, “A” BENCH: BANGALORE
Before: SHRI CHANDRA POOJARI & SMT. BEENA PILLAI
O R D E R
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
This appeal by assessee is directed against order of NFAC for the assessment year 2017-18 dated 27.10.2023 passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”). The assessee has raised following grounds of appeal:
1. That on the facts of the case the Learned CIT(A) has grossly erred in dismissing the appeal of the Assessee ex-parte without giving proper opportunity of hearing especially considering that the adjournments applications which were filed and duly acknowledged on E filing portal.
2. That the order passed u/s 250 is a non speaking order without considering the facts of the case and material on record. 3. That on the facts and in the circumstances of the case the learned CIT(A) was not justified in confirming the addition of 5,56,60,140 made to the returned income under section 50C of the Act.
4. That on the facts and circumstances of the case the learned CIT(A) was not justified in confirming the action of the Learned Assessing officer in substituting the value
Apurva Sarin, New Delhi Page 2 of 5 of consideration at Rs. 8,97,45,322 being the stamp duty value as against the actual consideration of Rs. 340,85,182 in respect of Property No.D-1032 New Friends Colony , New Delhi.
That the Learned CIT(A) / Assessing officer ought to have substituted the value of Rs. Rs.3,27,68,850 as per the valuation report dated 27.07.2020 issued by the District valuation officer in respect of the Property No.D-1032 New Friends Colony, New Delhi.
That both the learned CIT(A) and Assessing Officer failed to appreciate the real state of affairs of the real estate market at the time of transfer, being demonetization and the defaults committed by the Builder in respect of the agreement entered into by the appellant.
That the stamp duty rate is not the transaction value and that income under Income Tax Act has to be calculated on the real income and not hypothetical income.
On the facts and in the circumstances of the case, both the learned CIT(A) and Assessing Officer have erred in invoking section 50C of the Act.
That the order u/s 143(3) dated 27.12.2019, uploaded on the E-filing portal on 30.12.2019 is bad in law in as much as the digital signatures of the Learned Assessing Officer are unverified.
That the interest under section 234B and C has been wrongly and erroneously levied. 2. Facts of the case are that the assessee is an individual and employee of M/s. Institute for Stem Cell Biology and Regenerative Medicine, Bengaluru. Assessee has e-filed original return of income on 20.07.2017, for A.Y. 2017-18 and declared gross total income of Rs.2,40,31,445/-, claimed Chapter-VI-A deduction of Rs. 1,60,000/-, arriving at a total income of Rs. 2,38,71,450/-. Subsequently, case was selected for 'Limited' scrutiny through CASS to verify: " Sale consideration of property shown in ITR is less than the value as per stamp authority as per return."
Apurva Sarin, New Delhi Page 3 of 5 2.1 Notices u/s 143(2) was issued on 16.08.2018 and subsequently, notices u/s 142(1} were issued. The assessee filed details. After verifying the details submitted by the assessee the A.O found that there was a discrepancy in sale consideration declared and the value as per the stamp duty authority. Accordingly, reference to District Valuation Officer, New Delhi was made vide letter dated 28.11.2019 for Estimation of value of investment made by Smt. Apurva Sarin for the land and building at New Delhi, issuing of Commission u/s 131(i)(d) of Act, as the immovable in located at D-1032, Friends Colony, New Delhi.
2.2 After analyzing all the documents, the A.O held that the provisions of section 50C were applicable. The sale consideration was Rs. 3,40,85,182/- and the value of property as per stamp Valuation Authority, also mentioned in the return of income for A.Y.2017-18 was Rs. 8,97,45,322/-. Hence there was a difference of Rs.5,56,60,140/- which was added to the total income of the assessee. On appeal, the NFAC has confirmed the order of ld. AO. Aggrieved by the same, the assessee has filed the present appeal.
We have heard the rival submissions and perused the materials available on record. The main contention of the ld. A.R. is that there is a violation of principles of natural justice both at the end of ld. AO as well as by NFAC. It was submitted that the ld. AO called for valuation report of impugned property u/s 142A of the Act and the valuer submitted his report vide letter dated 27.7.2020. However, the assessment order was passed before receipt of same on 27.12.2019. Hence, the assessee carried the appeal before ld. CIT(A). The ld. CIT(A) issued a notice dated 6.3.2020 fixing the case on 9.3.2020 at 10:10AM for which the assessee sought the adjournment vide his letter dated 11.3.2020. Later, NFAC has given one more notice dated 15.1.2021 fixing the case on 20.1.2021 for which there was no response from the assessee. Further, NFAC given a notice on Apurva Sarin, New Delhi Page 4 of 5 6.10.2023 fixing the case on 13.10.2023 for which the assessee has sought an adjournment vide letter dated 13.10.2023. Later NFAC has given one more notice on 16.10.2023 fixing the case for hearing on 23.10.2023 for which assessee sought an adjournment vide his letter dated 23.10.2023. Since there was no proper compliance from the assessee, the NFAC has confirmed the order of ld. AO vide order dated 27.10.2023. Against this assessee is in appeal before us. In the meantime, the assessee filed a rectification application dated 10.11.2020 before ld. AO stating that assessee is co-owner of the impugned property with 50% of the ownership and market value of the property to be determined accordingly. Same was dismissed by the ld. AO vide his order u/s 154 r.w.s. 143(3) of the Act on 22.8.2023. Thus, it was submission of the assessee that there was a total violation of principles of natural justice and the issue may be remitted to the file of ld. CIT(A) after considering the argument of assessee’s counsel. As seen from the above facts of the case, it is quite clear that the assessee was deprived of fair opportunity of hearing before NFAC. Hence, in the interest of justice, we remit the entire issue in dispute to the file of NFAC{CIT(A)} for fresh consideration to decide in accordance with law after giving an opportunity of hearing to the assessee.
In the result, appeal of the assessee is partly allowed for statistical purposes.